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CIRCULAR No

CIRCULAR No. 96/2002/TT-BTC OF OCTOBER 24, 2002 GUIDING THE IMPLEMENTATION OF THE GOVERNMENT�S DECREE No. 75/2002/ND-CP OF AUGUST 30, 2002 ADJUSTING LICENSE TAX LEVELS

Pursuant to the Regulation on industrial and commercial taxes, issued together with Decision No. 200/NQ-TVQH of January 18, 1996 of the National Assembly Standing Committee;

Pursuant to the State Council�s March 3, 1989 Ordinance amending and supplementing a number of articles of the ordinances and regulations on industrial and commercial taxes and commodity taxes;

Pursuant to the State Council�s Resolution No. 473/NQ-HDNN of September 10, 1991 on license tax and slaughter tax;

Pursuant to the Government�s Decree No. 75/2002/ND-CP of August 30, 2002 adjusting license tax levels;

The Ministry of Finance hereby guides the implementation of the above-said Government�s Decree No. 75/2002/ND-CP as follows:

I. LICENSE TAX LEVELS:

1. Business organizations shall pay license tax at the following four levels:

a) VND 3,000,000/year, for all independent cost-accounting business establishments, including State enterprises, joint-stock companies, limited liability companies, private enterprises, enterprises operating under the Foreign Investment Law, foreign organiza-tions and individuals doing business in Vietnam, economic establishments of administrative and non-business agencies, Party or mass organizations and associations and armed force units, and other independent cost-accounting business organizations.

b) VND 2,000,000/year, for business establishments being dependent cost-accounting or daily financial-reporting branches, shops and stores, and production and business cooperation groups.

c) VND 1,500,000/year, for cooperatives (except those defined at Item d of this Point).

d) VND 1,000,000/year, for the following subjects:

- Cooperatives providing technical services in direct service of agricultural production, salt-making cooperatives, fishing cooperatives and credit cooperatives;

- The business establishments defined at Items b and c of this Point, if they have shops, kiosks, stores and/or service points� at places other than their locations, shall have to pay license tax of VND 1,000,000/year for each shop, kiosk, store or service point�

2. Other subjects and individual business households that shall pay license tax at six levels include:

- Individual production and business households.

- Laborers in enterprises (non-State enterprises, State enterprises, enterprises operating under the Foreign Investment Law..) who contract to cover all expenses and take self-responsibility for the results of their production and business.

- Groups of laborers in enterprises who share business contracts shall jointly pay license tax as prescribed at the above-mentioned Point 1.d. In cases where the groups of employees and laborers undertake the contracts, but each individual of these groups does business separately, each person shall have to pay license tax by him/herself.

- For business establishments, being nominally State enterprises, enterprises operating under the Foreign Investment Law, joint-stock companies, limited liability companies�, whose members conduct business activities independently and only contribute certain amounts to the units in service of the general management requirements, the license tax shall be collected from each member.

Particularly for cooperative members and groups of cooperative members (referred collectively to as cooperative members) who are assigned tasks by the cooperatives, if they fully meet the conditions prescribed at Item c, Point 1, Part II of the Finance Ministry�s Circular No. 44/1999/TT-BTC of April 26, 1999 guiding tax preferences for cooperatives, they shall not have to pay license tax separately; if they fail to fully satisfy the prescribed conditions, they shall have to pay license tax by themselves.

The Table of license tax levels applicable to the above-said subjects is as follows:

Unit: VN dong

Tax level

Monthly income

Tax level for the whole year

1

Over 1,500,000

1,000,000

2

Over 1,000,000 to 1,500,000

750,000

3

Over 750,000 to 1,000,000

500,000

4

Over 500,000 to 750,000

300,000

5

Over 300,000 to 500,000

100,000

6

300,000 or under

50,000

II. PAYING LICENSE TAX:

1. Time limits for license tax payment:

The operating or newly-founded business establishments, which are granted tax registration and tax codes in the first half of the year, shall pay license tax for the whole year, if they are set up and granted tax registration and tax codes in the second half of the year, they shall pay 50% of the yearly license tax. The establishments which are presently conducting production and/or business activities shall pay license tax right in the first month of the calendar year; establishments which have just started business activities shall pay license tax in the month when they are granted tax registration and tax codes.

The establishments, which are actually conducting business activities but fail to make tax declaration and registration, shall have to pay license tax for the whole year, regardless of whether they are detected in the first or second half of the year.

2. The business establishments shall pay license tax at the tax offices where they have made tax payment registration. In cases where a business establishment has many attached shops and stores located in different places within the same locality, the business establishment shall pay license tax for itself and its attached shops and stores located in the same locality. Branches, shops and stores located in other localities shall pay license tax at the tax offices of the localities where they are located.

After paying license tax, business establishments, shops and stores shall be granted by the tax offices license cards or vouchers certifying the payment of license tax (tax receipts or budget remittance papers certified by the treasuries), clearly inscribing names of the business establishments, shops and stores, their addresses, business lines, � to be presented when functional agencies inspect their business activities.

The business establishments which have no fixed location, such as those conducting in long-distance trade, mobile business, construction, transport or other self-employed trades, shall pay license tax at the tax offices of the localities where they reside or where they are granted business registration certificates.

III. ORGANIZATION OF IMPLEMENTATION:

1. In the late months of the year, the provincial/municipal Tax Departments shall have to review all establishments conducting production and/or business activities in their localities, investigate their actual turnovers and incomes in order to classify and grade them according to the Table of license tax levels. On that basis, they shall elaborate, approve and publicize the tax books for implementation. The review of business subjects as well as the elaboration, approval and issuance of annual license tax notices must be completed prior to December 31 of the preceding year.

2. The business establishments shall have to pay license tax fully and timely according to tax offices� notices. Each day of delay in license tax payment shall be subject to a fine of 0.1% (zero point one percent) of the payable amounts. If the business establishments evade the license tax payment, when being inspected, apart from having to pay the prescribed license tax amounts, they shall, depending on the nature and seriousness of their violations, be subject to a fine from one to five times the evaded tax amounts.

3. This Circular shall take effect as from January 1, 2003 and replaces Circular No. 69 TC/TCT of November 5, 1996 of the Ministry of Finance guiding the collection and payment of license tax. In the course of implementation, if meeting with any problems, organizations and individuals are requested to report them promptly to the Ministry of Finance for additional guidance.

For the Minister of Finance

Vice Minister
TRUONG CHI TRUNG